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WordNet-Online
Definitions from WordNet
Noun margin of safety has 1 sense
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Definitions from the WebMargin of SafetyDescription:The margin of safety refers to the difference between the intrinsic value of an investment and its market price. It is a risk management concept that helps investors determine the level of potential loss before an investment becomes unprofitable. This measure provides a cushion against unforeseen events and market fluctuations. Senses:1. Finance:In finance, the margin of safety represents the extent to which an investment is considered safe or low-risk. It is calculated by deducting the breakeven point or the expected downside from the present value of an investment. Example:Investors are advised to always consider the margin of safety before making any financial decisions. 2. Engineering:In engineering, the margin of safety refers to the factor of safety, which represents the extent to which a structure or component can exceed the expected load or stress without incurring failure. Example:The bridge was designed with a margin of safety of 2, ensuring its stability even under extreme weather conditions. Related Products:Investing BooksEngineering Safety Tools | ||||
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